Market orientation, CSR and financial and marketing performance in manufacturing firms in Ghana and Ethiopia

Abstract

Purpose

Corporate social responsibility (CSR) often gives a humanistic touch to the marketing activities of firms and even creates the atmosphere that businesses are reliable. Yet, little is known about its interaction effect on the relationship between market orientation (MO) and financial and marketing performance in emerging economies. The present study aims to comparatively examine the interaction effect of CSR on the direct link between MO and financial and marketing performance in manufacturing firms in Ghana and Ethiopia.

Design/methodology/approach

The interaction effect of CSR is examined using a quantitative methodological study design. A total of 439 usable questionnaires across manufacturing firms in Ghana and Ethiopia were collected and analyzed using SEM-PLS 3.0. Analytically, the study used product indicator approach to test the interaction effect of CSR on the nexus between MO and financial and marketing performance, while PLS-multigroup analysis (PLS-MGA) was used to test the significance of the observed differences in the results among the manufacturing firms in the two countries.

Findings

Results show that MO significantly improves financial and marketing performance. However, CSR reveals both “suppression” and “spurious” effects on the direct link between MO and financial and marketing performance under varying market conditions. The relationship between MO and financial performance is weakened in Ghanaian manufacturing firms but is strengthened in Ethiopian manufacturing firms when the level of CSR is high. Results, moreover, show that the nexus between MO and marketing performance is strengthened when CSR actions are high in both Ghanaian and Ethiopian manufacturing firms. The PLS-MGA revealed that these differences in findings in the two countries are statistically significant.

Practical implications

The findings suggest that company managers and marketing practitioners can use CSR in their marketing orientation campaigns to keep high performance and to remain competitive in today’s globalized market.

Social implications

Findings illustrate that incorporation of social interests and sustainability initiatives into firms’ marketing orientation strategies can meet stakeholders’ interest and expectation.

Originality/value

This is one of the few studies that examine comparatively the interaction effect of CSR on the MO–financial and marketing performance linkage in two emerging economies. The study extends our understanding of the RBV and stakeholder theories regarding the role of CSR in firms’ marketing strategies.

Citation

Oduro, S. and Haylemariam, L.G. (2019), "Market orientation, CSR and financial and marketing performance in manufacturing firms in Ghana and Ethiopia", Sustainability Accounting, Management and Policy Journal, Vol. 10 No. 3, pp. 398-426. https://doi.org/10.1108/SAMPJ-11-2018-0309